Italy sold 3.9 billion euros of five-year bonds at 5.6% yields, higher than 4.93% back in July, where rising yields were affected by the worsening debt crisis in Europe and renewed fears over a Greek default. In addition, demand for bonds was 1.28 times from the previous 1.93 times in July. The maximum quantity the Treasury targeted to sell is four billion euros.
Italy's borrowing cost rose again in the auction today, especially with the current worsening economic conditions in Europe and the deepening debt crisis, while rising fears that Greece could default added to the jitters in the market.
Italy handles the largest debt in Europe; therefore, rising yields would force more pressures and challenges on the Italian economy, where the nation's debt reached 1.9 trillion euros.